Now that the high season of spending has come to an end, it's a good time for borrowers to evaluate their finances and find ways to save money. Here are three things you can do during Labor Day 2021 to set yourself up for financial success for the rest of the year:
- Pay down credit card debt
- Shop for a lower mortgage rate
- Refinance your student loans
PAY DOWN CREDIT CARD DEBT
While many Americans took advantage of downtime during the coronavirus pandemic to pay down their credit card debt, consumers fell into old spending habits during summer 2021. Revolving consumer credit increased to $992.2 billion in June 2021, increasing at a seasonally adjusted annual rate of an astounding 22%.
Credit cards typically have the highest interest rate among popular financial products, which can cause the balance to skyrocket if you're just making the minimum payments. After a summer of overspending, take some time this Labor Day to create a debt payoff plan. One popular credit card debt repayment strategy is to take out a personal loan.
GET A DEBT CONSOLIDATION LOAN WITH BAD CREDIT
Personal loans offer fast, lump-sum funding that you can use to pay off unpredictable credit card debt. Unlike credit cards, personal loans are repaid in fixed, monthly installments — which means you'll always know how much you owe. They also tend to come with much lower interest rates than credit cards. The average personal loan interest rate is 9.58%, according to the Fed, whereas the average rate for credit accounts assessed interest was 16.30%.
Because they come with lower fixed rates, personal loans can help consumers save money while repaying their credit card debt on a consistent schedule. Borrowers who consolidated credit card debt into a personal loan using Credible's marketplace in May 2020 saw a potential savings of nearly $2,400 on average.
GET A BALANCE TRANSFER CREDIT CARD BY SHOPPING FOR A LOW RATE MORTGAGE
Mortgage rates are still near historic lows, which means refinancing should be a no-brainer if you own a home. Plus, mortgage refinancing is now cheaper than ever with the recent elimination of a 0.5% pandemic-era refinancing fee. But despite such favorable conditions, millions of homeowners still haven't yet refinanced their mortgages. Mortgage rates are holding steady below 3%, according to data from Freddie Mac.
SOURCED: FOX News